Truth in Precious Metals History and Future

Investing in bullion has been an ongoing action by millions for thousands of years. The truth is gold bullion was used as a source of payment for centuries. It wasn’t until Franklin D. Roosevelt, in 1933, took the American people’s gold and silver bars and coins back and made it illegal to possess these precious metals did gold stopped being a source of currency in the United States.

But why did FDR take back the precious metals? In 1933, after taking office President Roosevelt took action to get the United States economy out of a recession. He planned to put people to work rebuilding and expanding the U.S. The problem was that there were not enough reserves of gold and silver in the U.S. Vaults to print more money.

excerpt from 1933 executive order to turn in gold coins, bullion, and gold certificates

The US requirement is that the government cannot make more money than 40% of what is backed by the gold owned by the U.S. Government in the reserves. Having less than what they needed, Roosevelt took action and made possession of gold and silver against the law and paid out $20.67 per troy ounce to those who turned in their gold. Those choosing to hold on to the gold, except dentists who could have some gold for their business, were subject to 10 years of imprisonment if caught with gold in their possession.

This farce of collecting and holding gold only by the U.S. Government stayed true till 1977 when President Gerald Ford signed proclamation Pub.L. 93-373 which legalized the ownership of gold.

When the U.S. Government made it against the law to own gold, the U.S. dollar was backed by the gold in the reserves. Since 1971 the dollar was taken off the “gold standard” and it moves freely against other currencies.

Since 1977 the deficit has mounted and the U.S. prints money as needed. Since there is no value backing the dollar, it appears that precious metals should be an investor’s way to offset the decreasing value of the dollar and its impacts on a retirement account.

As of 1977, when it was legal to hold gold again, individuals, banks, and our own US government have been buying up gold. The increase in gold mining has skyrocketed since that time, and the spot price of gold is now over $1,700 a troy ounce. Investors cannot help but pick up gold as a hedge against inflation. Having gold or silver in your retirement accounts can help stabilize a portfolio when economic times are strained or when the stock market crashes.

Should you be concerned with the government’s seizure of your gold? I would never say never, but it would be difficult for the government to require all the gold and silver to be turned in. And think of this, if the government printed approximately $20 for each troy ounce in 1933, how devalued will the dollar be if they do the same at $1700 per troy ounce?

Keep buying and investing in gold and silver.…